Return on invested capital (ROIC) accretion at Optus is expected to continue, aided by postpaid price repair and receding inflationary pressures despite risks from Tier-2 rivals.
RHB also projects Nxera to deliver a 29.8% ebitda CAGR from FY2026 to FY2028, in line with management’s guidance of more than $300 million ebitda by FY2029. The forecast is supported by 200MW of new data centre capacity coming online by 2026 across Singapore, Thailand, Indonesia and Malaysia. The total capacity is set to reach 400MW in the longer term, including the expansion into Japan via a joint venture with a strategic partner.
Singtel’s $9 billion mid-term capital recycling plan has been anchored by staggered Airtel share divestments, raising over $5 billion in three years. RHB notes that other potential divestment sources include stakes in Gulf Energy (7.7%), Indara (13.8%) and Singapore Post (22%).
The capital recycling target funds the $5 billion value realisation dividend (VRD), of which $1.4 billion has been paid over the past two years, and the $2 billion value realisation share buyback programme aimed at longer-term earnings per share (EPS) and dividends per share (DPS) accretion. To date, $4 billion of the $9 billion target has been realised.
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“Overall, we see VRD comfortably sustaining yields of more than 4% for FY2026 to FY2028,” wrote the analysts.
As at 11.58 am, shares in Singtel are trading 6 cents lower, or 1.37% down, at $4.33.
